UPDATE 1-Brazil posts larger-than-expected budget deficit in May

BRASILIA, June 30 (Reuters) - Brazil’s budget deficit soared in May, the central bank said on Friday, as weak economic growth weighs on tax revenues and puts the government’s budget target at risk.

Brazil’s consolidated public sector, which includes federal and local governments and state-owned companies, posted a primary budget deficit of 30.736 billion reais ($9.30 billion) last month, the largest-ever for May in the series dating back to 2001, the central bank said.

The deficit was larger than market forecasts for a gap of 21.05 billion reais and followed a budget surplus of 12.9 billion reais in April.

The deficit in the 12 months through May reached 157.7 billion reais, equivalent to 2.47 percent of gross domestic product and above the official target for a deficit of 143.1 billion reais for this year.

Treasury Secretary Ana Paula Vescovi on Thursday told journalists the deficit widened mainly due to a decision to service judicial debts ahead of schedule, a move she said would help save between 600 million and 700 million reais this year.

She added that the government was on track to hit its annual budget target due to potential tax hikes and other measures under discussion that could boost extraordinary revenues by about 15 billion reais this year.